I have today placed in the Library a copy of my right hon. Friend the Home Secretary’s proposals for allocation of police grant for England and Wales in 2007-08. My right hon. Friend and I intend to implement the proposals subject to consideration of any representations and to the approval of the House.

The Government announced last year provisional funding totals for both 2006-07 and 2007-08. The introduction of multi-year settlements for the first time was widely welcomed by police authorities as a means of providing greater certainty and improving medium term planning. We intend to implement the settlement for 2007-08 broadly unchanged from last year’s announcement. It is our intention to move to three-year settlements with effect from 2008-09 which will allow authorities to plan more confidently.

The settlement for 2007-08 continues to build on unprecedented levels of investment into the police service in England and Wales. On a like for like basis Government grant and central spending on services for the police will have increased by over 62.0 per cent. or over £4.2 billion between 2000-01 and 2007-08. Our investment in recent years has helped to expand local policing, reduce crime and help to make our communities safer. Since peaking in 1995 British crime survey (BCS) crime has fallen 44 per cent., representing 8.4 million fewer crimes, with domestic burglary and vehicle crime falling by over a half and violent crime falling by 43 per cent. The risk of becoming a victim of crime remains at it lowest level recorded since the BCS began in 1981. The Government continue to work with the police service to ensure that they have the right tools to tackle crime without being burdened by any unnecessary rules and paperwork.

Our ambitious police reform programme continues to produce real improvements but there is still more to do. We will be publishing a vision for policing and a reform roadmap by the end of the year, following consultation with policing partners. A clear workforce strategy will ensure that the police service is well-led, skilled, motivated and representative of the communities it serves; this is also linked to initiatives to enhance performance and improve efficiency and effectiveness from available resources. To improve the capability and capacity for protective services, forces are working regionally and individually to develop new initiatives in collaboration, shared services and other efficiencies.

The Police Grant Settlement 2007-08

Total provision for policing grants and central spending in 2007-08 will be £11,043 million, an overall increase of 3.1 per cent. This includes a broadly flat rate increase of 3.6 per cent. in general grant for all police authorities in England and Wales. All police authorities will have planned ahead on this basis. The increase is above inflation (forecast inflation is around 2.7 per cent) and will enable police authorities to set reasonable final budgets and sustainable precept increases.

We propose to distribute the settlement as set out below. The table includes funding for both local and central spending.

Police funding proposals within the local government finance system are being announced by my hon. Friend the Minister for Local Government, today, and by the Welsh Assembly Government.

Provisional general policing grants (i.e. Home Office police grant, revenue support grant and national non domestic rates) for English and Welsh police authorities in 2007-08 compared with 2006-07 are given in Table 2.

The settlement continues to take account of our commitment to improve efficiency and effectiveness in the police service. Authorities will be expected to deliver 1.5 per cent. cashable efficiency savings and 1.5 per cent. non-cashable savings in 2007-08. If Police Authorities deliver efficiency gains, and exercise judicious financial planning, there remains no reason for them to set excessive increases in police precepts on council tax next year. The Government’s policy in relation to average council tax increases of less than 5 per cent. in England in 2007-08 has been clearly set out by my honourable Friend, the Minister for Local Government. The Government are prepared to take capping action if necessary to deal with excessive increases.

Welsh Police Authorities

In line with previous years we have ensured that Welsh police authorities are treated in line with English police authorities with respect to the floor damping mechanism. My right hon. Friend the Home Secretary has provided additional support of £12.9 million in 2007-08 to ensure that Dyfed-Powys Police Authority, Gwent Police Authority and North Wales Police Authority receive at least a minimum increase in grant in line with English authorities. The shortfalls are further funded by scaling police grant to South Wales Police Authority which would otherwise have received a general grant increase of 5.7 per cent. but now receives the equivalent increases to a police authority in England.

Metropolitan Police Funding

The settlement provides for the Metropolitan Police Authority to receive £192 million in 2007/08 (+£5m over 2006-07) in general grant to reflect their unique national and international role as well as the functions that fall to them by virtue of London being a capital city.

Special Formula Grant

We made clear in 2006-07 that we wanted to give police authorities more control over specific grants and consolidated four specific grants totalling £193 million into a single pot for each authority. We continue to expect authorities to honour commitments and agreed policy initiatives. Totals for each Police Authority are set out in the Police Grant Report 2007-08.

Specific Grants for Police Authorities

Police authorities will continue to receive extra funding through a number of specific grants for particular schemes. Targeted grants were introduced as a direct response to what the police service and the public told us they wanted. Total provision for specific grants in 2007-08 is £1,699 million (Table 3).

The main specific grants are:

Crime Fighting Fund: £277 million will again be made available to forces to continue to support the costs of officers recruited through the crime fighting fund. In 2007-08, there will be additional flexibility for forces selected by ACPO to be demonstration sites for workforce modernisation in order to improve the delivery of services to the public.

Police Community Support Officers (PCSOs): For 2007-08 we will be providing £315 million in total towards the cost of 16,000 PCSOs to have a dedicated neighbourhood policing team embedded into every area in England and Wales by 2008.

Basic Command Unit (ECU) Fund: £50 million will again be provided for BCUs. In England, ECU Commanders will again have discretion to pool their allocations locally in local area agreements where they exist or in the Safer and Stronger Communities Fund where they do not.

Initial Police Learning and Development Programme (IPLDP): We will provide the same level of funding for IPLDP in 2007-08.

Counter Terrorism Funding

In January 2006 the Government announced a single consolidated counter terrorism grant for the police service, enabling it to increase its counter terrorism capability and improve effectiveness. In order to achieve this we pulled together resources from existing grants, including the provision for dedicated security posts formerly in general grant. For 2006-07 this totalled more than £460 million including an extra £63 million for local and regional policing and £30 million for the MPS. In 2007-08 we will be increasing this extra funding to £100 million for local and regional policing and £45 million for the MPS. To enhance further the counter terrorism capability of Police authorities, we have also made provision of £25 million within the increase in general grant to Police authorities in 2007-08.

We have been working very closely with the Association of Chief Police Officers on this matter. We see an important role for ACPO in the management of this grant and for ensuring coherence, strategic direction and for the provision of a nationally co-ordinated response. We have worked closely with ACPO to ensure that both this uplift and funding from the new consolidated counter terrorism grant are used to create a significant increase in the strength of the police’s counter-terrorism capability. Both we and ACPO are committed to ensuring that the Police Service both nationally and regionally has a robust, resilient and effective counter terrorist capability.

Central Spending on Policing

Provision is made for the costs of organisations supporting policing such as the National Policing Improvement Agency (NPIA) and the Serious Organised Crime Agency (SOCA) as well as scientific and technical support.

SOCA was successfully launched on 1 April 2006. It is a new type of law enforcement body with workforce strength of 4,200 staff and an initial budget of £415 million.

We intend to establish the NPIA on 1 April 2007. It will be a central resource to help police forces improve how they work, and will be committed to driving continuous improvement across policing as a whole in order to deliver better services to the public. It will be owned and led by the police and will introduce a radically different model of police service leadership, as well as producing greater efficiency, consistency and clarity of purpose in service delivery. The NPIA will replace the existing organisations of Centrex and the Police Information Technology Organisation (PITO). There will also be significant implications for the work of ACPO, the Home Office and the APA. Its budget will be announced by 31 January.

Conclusion

We have delivered another fair settlement for all police authorities in England and Wales which will enable them to provide an effective and efficient policing service. We will expect forces to deliver further sustained improvements in performance and continue to make further efficiency gains. We will work closely with the police service over the coming months and listen carefully to their concerns as we consider the distribution of resources for the coming three years (2008-09 to 20010-11). Decisions will be announced next year.